Kenya talks to London as goods face hefty tax

What you need to know:

Though Britain will officially be pulling out of the EU next year, there is a likelihood of Brexit affecting the movement of Kenyan goods to the UK.
UK is Kenya’s fourth largest export destination but the balance of trade has always been in favour of Britain.

Kenya has held informal bilateral talks with the UK as it pushes for a new trade deal to protect its exports to Europe from taxation following exit of the country from the European Union (EU).

Trade principal secretary Chris Kiptoo said though Britain will officially be pulling out of the EU next year, there is a likelihood of Brexit affecting the movement of Kenyan goods to the UK.

“We are currently holding some informal talks with the UK to ensure our exports to Britain are not impacted when the country eventually pulls out of EU in 2019,” said Dr Kiptoo.

The PS said the discussion revolves around the issues of having Kenyan goods access the UK market under the duty free tariff, as is currently the case for horticultural produce destined to EU market under the Economic Partnership Agreement (EPA).

“What we want is to establish a different partnership that is closely similar to EPA, which will ensure that our goods enjoy duty free access to Britain,” he said.

UK is the country’s fourth largest export destination but the balance of trade has always been in favour of Britain.

All East African Community (EAC) members have been negotiating the EPA since 2007 leading to conclusion of negotiations in 2014. For a deal to be reached though, all the EAC member states have to sign the agreement as a bloc.

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Kenya is at the moment accessing the EU market under a special arrangement after three other members failed to endorse EPA last year.

In March last year, Nairobi accused Tanzania and Uganda of insincerity in their refusal to join the rest of EAC members in signing the EPA.

The two countries argue that the deal will see goods from Europe flood their countries, a move they say is detrimental to their growing sectors especially agriculture.

President Yoweri Museveni was in the country in December when he assured his Kenyan counterpart that he will arrange a meeting of the East African Community (EAC) Trade Ministers to discuss the stalled EPA agreement after Uganda and Tanzania opted out.

Kenya’s top exports to Europe include tea and horticulture, which earn billions of shillings in foreign exchange thanks largely to duty-free market access in Europe.